MultiPlan refinances to extend debt capital structure
The transaction is expected to position MultiPlan for more sustainable long-term growth amid revenue losses this year.
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MultiPlan, a data technology company that works primarily with payers, has announced refinancing to extend the maturities of its entire debt capital structure.
MultiPlan said it has entered into an agreement with certain ad hoc groups of noteholders and lenders that collectively own approximately 78% of MultiPlan's outstanding debt.
"Our top priority is investing in our business to drive MultiPlan's organic growth. This refinancing extends our debt maturities and will ensure that our capital structure enables us to operate as efficiently and sustainably as possible," said MultiPlan CEO Travis Dalton.
WHY THIS MATTERS
MultiPlan's revenues were down 5.1% in 2024, compared to 2023.
The transaction is expected to comprehensively reorganize MultiPlan's capital structure and position it for more sustainable long-term growth, the company said.
The transaction supports the company's Vision 2030 Transformation Plan.
Notably, it will terminate the existing Revolving Credit Commitments and incur $350 million in new "first-out" first lien revolving credit commitments, thus extending the maturity of the company's existing revolving commitments from August 24, 2026, to December 31, 2029.
THE LARGER TREND
MultiPlan has said it is committed to bending the cost curve in healthcare by delivering transparency, fairness and affordability to the healthcare system.
It provides health insurers with tools and data analytics to help manage healthcare costs by negotiating prices with providers and recommending fair payment amounts for out-of-network medical services, MultiPlan said.
"Our focus is on identifying medical savings, helping to lower out-of-pocket costs and reducing or eliminating balance billing for healthcare consumers," MultiPlan said.
However, the company has been sued over its practices. In October, the American Medical Association sued MultiPlan alleging a price-fixing conspiracy with health insurers. The primary accusation is that MultiPlan uses its data analytics to manipulate reimbursement rates, effectively fixing prices at a low level for providers.
MultiPlan, based in New York City, works with more than 700 healthcare payers and over 100,000 employers.
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